Warren Buffett always seems to be talking on TV about buying stocks. But savvy investors want to know what companies are in the portfolio of the man called the "Oracle of Omaha" after his hometown in the Midwestern state of Nebraska.
This time of year, investors are given to key pieces of information that gives insight into the billionaire stock picker’s strategy: SEC filings and his annual letter to Berkshire Hathaway shareholders, which you can read
here.
Berkshire Hathaway
— which employs more than 350,000 people in the insurance, railroad and many other firms it controls — also holds large stakes in Coca-Cola, IBM and other companies.
Motley Fool has studied the Buffett tea leaves and has suggested three companies you should buy if you want to be like Warren.
Deere & Company (NYSE: DE)
Deere's sales fell 15% year over year in its fiscal first quarter as net farm income fell more than 30% last year and it is projected to drop by another 3% this year, explains the Fool’s Todd Campbell. "Buffett's 22.9 million-share stake suggests he thinks the odds are in his favor for a rebound at some point down the line. Investors, however, may need to be patient for this one to pan out,” he writes.
General Motors (NYSE: GM)
The Fool’s John Rosevear says after meeting GM CEO Mary Barra, Buffett and his team bought 50 million shares of GM — and Buffett bought himself a new Cadillac. As of the end of 2015, Berkshire held exactly 50 million shares of General Motors, or about 3.25% of the giant automaker. That's enough to make Buffett and company the General's fourth largest shareholder. “If you want to buy a good company for long-term growth at a good price, General Motors sure looks like one,” Rosevear writes.
Kinder Morgan (NYSE: KMI)
The Fool’s Sean Williams says Kinder Morgan has been crushed recently by weakness in the natural gas market (Kinder Morgan gather, stores, transports, and refines natural gas and liquid natural gas), as well as oil price weakness. Kinder Morgan also slashed its dividend by 74% in December to preserve cash. “But most investor worries seem a bit overblown,” he writes. “Buffett, being all about the big picture, likely views the recent decline in Kinder Morgan as an overreaction. If these estimates hold water, then natural gas is going to play a vital role in the U.S.'s future, with Kinder Morgan reaping handsome rewards. In the meantime, Kinder Morgan shareholders can sit back and collect a 2.7% dividend yield until presumed sensibility takes hold.”
For his part, in Buffett’s annual letter to shareholders this year, he dismissed what he called a "negative drumbeat" from the Republican presidential hopefuls.
"It's an election year, and candidates can't stop speaking about our country's problems — which, of course, only they can solve," Buffett wrote, without naming names.
"Many Americans now believe that their children will not live as well as they themselves do. That view is dead wrong," the 85-year-old philpanthropist said. Babies born in the United States today are actually the "luckiest crop in history," he added.
"For 240 years it's been a terrible mistake to bet against America, and now is no time to start," he said. "America's golden goose of commerce and innovation will continue to lay more and larger eggs."
(Newsmax wire services contributed to this report).
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